Gervais Williams interview - we want your questions!
Gervais Williams is one of Britain’s best known fund managers and perhaps the industry’s biggest advocate of investing in smaller companies. His strong performance record in recent years is in part down to a focus on buying good quality small-caps at cheap prices and strong yields.
Gervais is managing director of fund management group Miton where he manages a number of funds that together total more than £1 billion. His 30 year career in the City included 17 years at Gartmore before making the move to Miton. Among other industry positions, he is also on the EU Taskforce reviewing why the number of smaller IPOs has declined over recent decades.
Gervais has written books including Slow Finance and The Future is Small, where he bangs the drum for resisting the lure of glamorous, often expensive growth shares in favour of value and income opportunities at the smaller end of the market.
With all this in mind, Gervais was a top target for my interview series with some of the country’s most influential investors. So I’m taking him out for lunch to find out precisely what makes his investing strategy tick and why he thinks smaller companies offer some of the greatest opportunities.
If you have any questions you’d like me to ask him, please feel free to let me know in the comments below. The normal caveats apply (I might not be able to ask everything and delays to these interviews can happen!).
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15 comments
Hi Ben, have I missed your Gervais Williams report or is it still being written up?
Thanks very much to everyone who contributed questions. I met with Gervais today, we covered lots of stuff and I'll get it all written up and cleared as soon as I can!
Ben
In view of the current news relating to tax avoidance and the potential crackdown on offshore tax havens, are you concerned about your substantial investment in STM Group who heavily operate in this area?
Can you please ask Gervais about Fishing Republic (LON:FISH), a company held by Miton since they IPO'd in June 2015 (they hold 4.9m shares or around 18% of the company).
It is evident that Gervais has faith in the Board's strategy to execute their planned buy and build strategy and consolidate the highly fragmented fishing tackle (retail) market but what key attributes attracted him to the company? Like any small business, and especially one looking to expand significantly, what does he see as the primary business risks?
do you think the stock market is changing trends in general to what it was once, and have you had to re-adapt your views and strategies accordingly.
What are your top 3 mandatory requirements when you look to invest in a share? i.e. if a company fails in any one of these, then it goes into the reject pile. For example, for me, if I have any doubts about the competence or integrity of the senior managers, then I go no further and move on.
How can I get that 'red ear' look?
In March 2014 you were quoted by the AIC:
"The whole point about portfolio management is that risks are moderated by diversification, and it is this diversification that permits us to invest in a range of stocks that might be the Quindells of the future."
Is investing in the Quindells of the future still an aspiration?
This is what you said about Quindell in July 2014:
http://www.whatinvestment.co.uk/comment-and-analysis/2467782/gervais-williams-why-i-am-sticking-with-quindell-despite-the-criticisms.thtml
Do you still hold the same views about Quindell now?
What are the red flags that are most likely to put you off investing in a company?
How frequently do you re-examine the investment case that formed the basis of your decision to invest in a company.
Do you run a stop loss on holdings
What quantitative metrics do you pay most attention to in support of your buy AND sell decisions?
Are there any plans to broaden the 'multi-cap income with small cap tilt' approach and develop a fund with a global remit?
How many investments result from companies/advisers pitching themselves to you? Or are all investments researched and initiated without mgt. contact?
Nice general knock up question. What were your best/worst small cap investment decisions and why? (Not necessarily most/least profitable but gave you most satisfaction, e.g. a contrary play against the market tide; decision to sell when everyone else is piling in etc..).
I had a quick look at the Miton UK Smaller Companies which I believe you manage. I see in the top ten holdings STM (LON:STM) and Bilby (LON:BILB). I do hold STM (LON:STM) and I have considered Bilby (LON:BILB), the problem with both of them is liquidity and spread, the spread of STM (LON:STM) is around 5% now, but last year Bilby (LON:BILB) was 8-10% and when STM was falling it was similar. Trying to buy or sell these shares in any amounts over about £2,000 is difficult. As a fund manager are you not concerned about being able to sell such shares?